New research into the gig economy reveals how it has reshaped the American workforce landscape. Initially intended to explore ways that companies could entice the gig workforce back to traditional work spaces, the study took an unexpected turn. It became clear that the gig economy’s rise is not just a transient event; it’s a lasting change that calls for a shift in the fundamental models of employer-employee dynamics.
So, what should companies make of it?
To capitalize on the gig economy’s potential, talent leaders should recognize this resilient, autonomous talent pool and harness its capabilities. The reality is that the gig economy does not merely represent a contingency workforce; it’s a strategic opportunity to tap into a diverse range of skills, address talent gaps, and bolster internal teams.
Flexibility has emerged as a driving force behind the preference for gig work. A remarkable 82% of surveyed gig workers deliberately chose self-employment. The allure of flexible work arrangements, enabling people to better determine when and how they work, entices 63% of freelancers.
Consequently, integrating gig workers demands incorporating hybrid work models. Adapting to freelancers’ work hours and locations can bridge the divide between corporate norms and gig-worker autonomy. The challenge lies in striking a balance that capitalizes on people’s independent mindset while nurturing collaborative bonds within your organization and the workforce writ large.
Closing the Pay Gap
Pay equity remains a significant hurdle in the gig economy. The data highlights a stark reality: Women in the gig economy face a 32% pay gap on average, far worse than the already concerning gender wage disparity in the broader workforce.
Companies must take a stand against this inequality, addressing not only gender-based pay gaps but also disparities across minorities.
Given an employer’s power to determine the value of work, businesses play a key role in leveling up traditionally undercompensated workers by reassessing the value of their services as compared to, for example, technology or managerial roles (which are generally paid at a higher rate). Doing so underscores a company’s commitment to a just and inclusive compensation structure, a move that resonates with gig workers and can attract diverse and high-quality talent.
A Pathway to Attracting Gig Workers
Benefits, long a hallmark of traditional employment, have been conspicuously absent from the gig economy landscape. Companies should start thinking about how to bridge this gap, creating an environment where gig workers feel more valued and secure.
Notably, health insurance, a necessity for wellbeing both physically and mentally, remains elusive for many gig workers. A notable 23% of gig workers lack health insurance, highlighting existing disparities in healthcare access. Companies that find a way to extend this safety net signal a genuine concern for the welfare of their gig workers, thereby bolstering their appeal as places to work.
The absence of retirement provisions for freelancers underscores another critical deficiency. With a mere 8% of female gig workers having a pension plan, they face a long road to financial security. Where permitted, by offering options such as IRAs, 401(k)s, or and similar benefits, it’s possible to extend a helping hand toward gig workers’ long-term stability.
Ultimately, as the gig economy grows, it continues to challenge conventional employment norms at many employers. There appears to be no explicit ruling against offering benefits to independent contractors, but employers nonetheless need to consult their legal and tax advisors in order to navigate the issues carefully.